Blog Post

SmartThings nets $12.5M to own the smart home

SmartThings has raised $12.5 million in a Series A round of funding from Greylock Partners and Highland Capital Partners, bringing investment in the Washington D.C.-based startup to $15.5 million. This is an important chunk of change for the company as it races to build out a platform for the consumer-facing internet of things.

SmartThings makes a $299 hub unit and provides sensors that users set up in their homes. The real magic isn’t in the hardware, it’s in the services that SmartThings envisions and is trying to build out around that hardware. Consumers can use the SmartThings app store to find innovative ways to connect their devices (for example, a “recipe” that emails you when the mail arrives in your mailbox), plus, a partnership with IFTTT also let’s users tie their connected devices to the web.

To hear more about SmartThings’ vision check out my podcast interview with Alex Hawkinson, the CEO of the company, or his fun presentation on 10 things you can do in a smart home. What I like about the company’s approach is that it really subscribes to the ethos that a smart home platform should support as many devices as a consumer wants to bring into the home, whether it’s built by SmartThings or not.

The eventual goal will be making money via an app-store style model for the recipes as well as selling devices through its store. The back-end developer environment SmartThings is building around sensors and connected devices is really compelling; the idea being that consumers will find it easy to bring new devices onto the network if they have a SmartThings hub and then be able to control it through the app. Developers will find writing apps for the home sensors easy because SmartThings is building a UI that makes it simple to define what a sensor can do.

This is exactly where I’d like to see the smart home go, although it’s unclear if the more closed (yet easier to use) options out on the market win over the consumer. This round of capital will help SmartThings add more device support, so when a consumer attaches a new device the app can control it without the consumer jumping through hoops. Today the platform isn’t there (so far, none are) so having the capital to hire developers and build out the device library could help determine a winner.